Massachusetts Gov. Charlie Baker will kick off the National Academy for State Health Policy’s 33rd annual conference with a keynote address at 4:30 p.m. (ET) Monday, Aug. 14, 2020. The conference, originally scheduled for Boston, will be delivered on-line.
Massachusetts has long been a national health reform leader and Gov. Baker has played a key role in many advances since his election in 2015. Previously, he served 10 years as CEO of the non-profit Harvard Pilgrim Health Care, which the National Committee for Quality Assurance repeatedly ranked as the nation’s top-ranked health plan during his tenure. Earlier, Gov. Baker held key positions in Massachusetts state government as Secretary of Health and Human Services and Secretary of Administration and Finance.
Gov. Baker is leading Massachusetts through the COVID-19 pandemic and has prioritized testing and contact tracing programs. His administration implemented reforms at the state’s health exchange, the Massachusetts Health Connector. Massachusetts currently leads the nation in health insurance coverage with only 3 percent of its population uninsured.
Last year, Gov. Baker introduced An Act to Improve Health Care by Investing in VALUE, designed to deliver more cost effective, nimble, and patient-centric health care for the 21st century. A cornerstone of the comprehensive plan is a significant investment in primary care and behavioral health, while maintaining the state’s cost growth targets administered by the state’s Health Policy Commission. That first-in-the-nation, cost-growth benchmarking system has reported success in bending the health care cost trajectory and other states are now replicating it.
Baker’s newest proposal for the plan would add enforcement provisions that require health care providers who exceed the target to pay fines. The proposal, which the state Legislature is currently deliberating, also includes provisions to lower pharmaceutical costs, including subjecting manufacturers who raise drug prices excessively to fines and redirecting those revenues to support community hospitals and safety net providers.
Register for NASHP’s annual conference, State Health Policy: Flexibility and Resiliency through COVID-19 and Beyond, on Aug. 17-19, 2020.
Governors can control costs, advance their priorities, and enhance lives by improving the social and economic conditions that make up 80 percent of the factors affecting their residents’ health. Governors are uniquely positioned to maximize state resources to address the conditions affecting health by leading cross-agency and public-private collaborations, leveraging siloed state resources, and advancing evidence-based health policy approaches.
State of the state speeches provide critical insights into governors’ policy proposals that impact the health of their residents. Last week, the National Academy for State Health Policy (NASHP) highlighted the health care issues governors raised in their 2020 addresses. This week, NASHP examines how governors addressed the social and economic issues that heavily impact health and well-being.
As of Feb. 10, 2020, 39 governors had outlined health-related social and economic policy priorities – most commonly, education, the environment, and livable wages, followed by justice system reforms and social and health equity improvements.
Their other priorities included reducing violence, food insecurity, homelessness, maternal mortality, and human trafficking. Compared to the 2019 speeches, governors’ priorities have shifted in the last year — more addressed the need for environmental protection, justice system reform, and expanded access to broadband. Given that health is shaped by myriad conditions in which people live, work, and age, it is not surprising that many topics were interrelated and crossed sectors. For example, governors who mentioned plans to address education touched on both livable wages for school employees and violence prevention in schools.
Of the 34 governors who addressed education, many focused on early education and early literacy, student debt relief, and increased school resources. Here are some excerpts:
- New York Gov. Andrew Cuomo said: “Education is the civil rights issue of our time, and we should be proud that we invest more per student than any state in the nation. In our state, wealthier schools spend as much as $36,000 per student. In a poorer school, we spend as little as $13,000 per student. The progressive path is clear. Use our state funds to reduce the funding disparities. Our state funds are only 40 percent of the funding. Sixty percent of the funding comes from local taxes. … [Let’s] use state funds to raise those at the bottom. … Fund the poorer schools and close the education gap. And let’s do it this year.”
- Colorado Gov. Jared Polis said: “And in my budget this year, we’re proposing to help an additional 6,000 children attend preschool, which for the first time will bring coverage to half of all eligible kids in Colorado… And early childhood education isn’t just about giving our kids a great start in life. Every dollar invested in high-quality preschool produces a seven-dollar return on investment due to higher earnings, lower special education needs, greater tax revenues, less dependency on public assistance, and lower crime rates. This isn’t just the right thing to do, it’s the smart thing to do.”
Thirty governors addressed the connection between the environment and human health through environmental goals, such as increased production of renewable energy, preservation of natural resources, and decreased emissions:
- Florida Gov. Ron DeSantis commented: “[T]he comprehensive water quality legislation I have proposed…. represents the initial recommendations of the Blue-Green Algae task force that I launched upon taking office. It is based on sound science and provides a roadmap to reduce nutrients in our water. … We at the state level will also be doing our part to fortify our infrastructure in our areas most vulnerable to increased flood risks. … The bottom line is we have a chance to take bold action to make a lasting positive impact upon Florida’s environment. Let’s seize this opportunity.”
- Vermont Gov. Phil Scott said: “We’re committed to restoring and protecting our lakes and rivers, which will cost Vermonters nearly $1 billion over the next 20 years….We rank high when it comes to air quality, but we can do more to lower emissions in our state, so I’ll propose using [Volkswagen] settlement funds to help more Vermonters purchase electric vehicles. And my budget will propose a long-term funding source for our water quality initiatives, using existing revenues and a new delivery model to put this money to work on the ground.”
Research suggests that generating livable wages by raising the minimum wage can help improve health and reduce infant mortality. Of the 25 governors who addressed livable wages, several mentioned raising teachers’ pay or raising the minimum wage:
- Connecticut Gov. Ned Lamont said: “We adopted America’s best $15 minimum wage law, which has already helped lift thousands of families out of poverty. Right now, working families have seen a $35 per week raise that lets them spend time with their child instead of picking up another work shift. In the next five years, that law will help more than half a million Connecticut workers – especially women and people of color – receive their fair share of a growing economy.”
- Georgia Gov. Brian Kemp explained: “In my budget, I have included a $2,000 pay raise for all public school educators. This raise will enhance retention rates, boost recruitment numbers, and improve educational outcomes in schools throughout Georgia. By investing in our educators, we can build a strong house, a place where everyone learns and all Georgians have the opportunity to thrive.”
Twenty-five governors highlighted plans to reform the criminal justice system and decrease recidivism through increased funding for re-entry programs, new job-match programs, and recovery services:
- Iowa Gov. Kim Reynolds explained: “I’ve made it a priority of this administration to focus on prisoner re-entry and rehabilitation, because our prisons shouldn’t be one stop in a circle that leads back to prison. Those in our correctional facilities are serving time for a reason, but when they leave, we want them to succeed. … I am renewing my support to amend our Constitution so that it no longer bars felons from voting after they’ve served their sentence.”
- Kentucky Gov. Andy Beshear said: “Successful criminal justice reform must do several things. It must reduce our incarcerated population. It must decrease recidivism and the revocation of probation and parole. It must address the racial bias and racism in our justice system. It must provide meaningful addiction treatment and recovery services. It must consolidate, and not expand our state prison institutions.”
Twenty-two governors mentioned the need for educational, economic, and social equity:
- Illinois Gov. J.B. Pritzker commented: “The input of women and people of color needs to be treated as essential to decision making – not as some token show of diversity. Bit by bit, inch by inch, I am working hard to reverse the harm that has been done to people and communities that have been left behind over many generations by government policies and elected officials who were content to simply ignore them. I remind myself every day that I have obligations not just to the current people of Illinois, but to the many people who preceded us who were discriminated against, harmed, treated as lesser, and forgotten – lasting damage that echoes through too many communities today. We are obligated to make our future more equitable and fair.”
- Michigan Gov. Gretchen Whitmer said: “And my administration is working to ensure a safe, healthy environment for all new moms, especially moms of color. This year, my budget proposal will extend health coverage for low-income women who have had babies. We will extend postpartum care from 60 days to one full year after giving birth, and move up a woman’s first postpartum visit to within three weeks, with a comprehensive visit within 12 weeks. This will help new moms heal, and work through postpartum depression and anxiety after giving birth.”
Sixteen governors addressed the need to expand broadband and high-speed internet services, especially in rural areas:
- Arizona Gov. Doug Ducey said: “Rural areas still lack high-speed Internet. Let’s triple our investment in Rural Broadband Grants, and also invest $50 million in Smart Highway Corridors to install broadband along our rural interstates. This will make our highways safer and smarter than ever before and pave the way to get all of rural Arizona logged on.”
- Idaho Gov. Brad Little commented: “I am also pursuing another strategic investment – improvements in Idaho’s broadband infrastructure. For both urban and rural Idaho to attract business and enhance our citizens’ quality of life, Idaho must be connected. I am adopting a recommendation from my Broadband Task Force … to establish a State Broadband Office. We will utilize existing resources at Commerce and unite the efforts taking place across the state to ensure all areas of Idaho are connected. Improving broadband will also expand tele-health and pharmacy access in rural Idaho, where the distance to a doctor or pharmacy can be overly burdensome to entire communities of people.”
Fifteen governors proposed strategies for preventing violence and suicide in their state:
- Rhode Island Gov. Gina Raimondo explained: “Protecting our future means protecting our neighborhoods, workplaces, and schools from gun violence…. Even one tragedy with an untraceable, homemade firearm is one too many. Loopholes that allow extremely dangerous people to get guns need to be closed. Military-style assault weapons don’t belong in our communities and should be banned. So this year, I will once again propose a comprehensive package of gun reforms.”
- Wyoming Gov. Mark Gordon said: “One area of focus is on the prevention of suicide. This issue struck close to home when I heard from classmates of my own kids who have struggled with these dark thoughts. Too many of our residents are suffering – and sadly, far too many are acting on it. I have supported funding to launch an in-state suicide hotline. This is just a start. We need to work with providers and leverage all of our state resources to do a better job of attending to those in need.”
NASHP will continue to track these trends along with proposals and other legislative and executive action on social and economic issues that have clear implications for health.
*This analysis includes information from state of the state speeches, and not from inaugural presentations or budget addresses.
In their 2020 state of the state speeches, governors identified new health policy initiatives on a wide range of issues. As of mid-February, 42 governors had delivered speeches or outlined key budget priorities, and all addressed health issues – most commonly strategies to tackle health care costs and behavioral health issues. Below are highlights of the key health themes that governors raised.
State-based marketplaces (SBMs) give states more control over their local health insurance markets and consistently outperform states that use the federal marketplace with higher enrollment, more insurance plan choices for consumers, lower premium rate hikes, and a younger consumer base. These accomplishments are especially notable given recent federal policy actions that have unsettled insurance markets and contributed to a national rise in uninsured rates.
SBMs’ success coupled with the evolution of new and lower-cost marketplace management technology is prompting a growing number of states to convert to the SBM model. Nevada recently decided that converting from the federal platform to an SBM offered the state more control to provide insurance plans to consumers at a lower administrative cost and recently New Jersey and Pennsylvania have gone even further, enacting laws to move off the federal marketplace to create their own SBMs to be operational by January 2021.
Both states will finance their programs by converting the current federal assessment on health plans to a state-administered fee. New Jersey Gov. Phil Murphy signed A5499, which empowers the state’s Department of Banking and Insurance to set up the SBM within the agency and to coordinate with Medicaid to assure integrated eligibility for both programs. The law also creates an advisory committee to guide the work. New Jersey’s creation of its own marketplace follows successful efforts last year to enact an individual mandate that requires insurance coverage and the creation of a reinsurance program to help lower premium costs by providing funds to offset the impact of high-cost enrollees.
In Pennsylvania, Gov. Tom Wolf last week signed HB 3, which enjoyed bipartisan support, that creates a new, quasi-independent state agency to administer the SBM. Pennsylvania expects its state-based exchange will save the state money in the long term. The savings will be used to fund a portion of a state reinsurance program, which could reduce insurance premiums by up to 10 percent. The state expects to seek a Section 1332 waiver to enable it to develop its reinsurance program.
As a result of these two states’ actions, 20 states will soon operate an SBM or an SBM that utilizes the federal platform. Learn more about how states can create SBMs from marketplace leaders here.
Last week, Maine Gov. Janet Mills signed into law a comprehensive package of prescription drug cost control legislation that addresses pharmaceutical prices throughout the supply chain. The four new laws include:
- Stricter requirements on pharmacy benefit managers (PBMs);
- Updates to its drug transparency program to require more prescriptive data collection and enforcement mechanisms;
- Establishment of a drug affordability review board; and
- Support for the state to pursue a wholesale drug importation program.
By developing a comprehensive and integrated package of new laws, Maine is forging new ground in the fight against high drug prices.
Comprehensive PBM Regulation – LD 1504
Maine’s new law regulating PBMs essentially replaces opaque PBM business practices by imposing more transparent, clearly defined fiduciary relationships that include state enforcement and oversight through the health insurance carriers with whom PBMs contract.
As other states have done, the law requires PBMs to obtain a license from the Superintendent of the Bureau of Insurance. Licensure is a critical component of effective PBM regulation because it allows the state to know how many and what entities are operating as PBMs in the state. This also gives the state power to suspend or revoke a license should the PBM break the law or engage in fraudulent activity.
Maine’s new law also includes provisions that haven’t been enacted by any other state. Under the law, if health insurance carriers use PBMs to manage their prescription drug benefits, the carrier is responsible for monitoring all activities performed by its contracted PBM. By tasking carriers with PBM monitoring responsibilities, Maine is leveraging its Bureau of Insurance to enforce these provisions of the law. The law also stipulates that PBMs have a fiduciary duty to their insurance carriers when managing their prescription drug benefits and as such, carriers are empowered to hold PBMs accountable for their financial dealings.
Monitoring PBM financial practices can be challenging. For example, PBMs often use maximum allowable cost (MAC) lists that document the maximum amount a plan will pay for generics and brand-name drugs that have generic alternatives. It is standard industry practice for PBMs to use prices from one MAC list to pay a pharmacy for dispensing a drug to a consumer and then use a different MAC list’s price to bill the carrier. Using multiple MAC lists allows PBMs to practice “spread pricing” — they reimburse pharmacies using a low price from one MAC list while charging the health carrier a higher price from a different MAC list and keeping the difference. To combat this practice, Maine now mandates the use of a single MAC list that must be identified by the PBM so prices are transparent to all parties, including pharmacies and the carrier. Additionally, using a single MAC list provides more clarity to all parties about how MAC pricing is determined and updated and how PBMs select products for inclusion on a MAC list.
To lower costs for consumers, the law requires carriers to use the prescription drug rebates that PBMs negotiate to either lower health plan premiums or to reduce out-of-pocket costs for consumers when they purchase prescription drugs. Without the ability to retain a portion of the rebate, PBMs will now be paid for managing the prescription benefit directly by the carrier. Maine’s law includes provisions that explicitly classify PBM expenses as administrative costs for purposes of calculating a health plan’s anticipated loss ratio. The classification of PBM expenses as administrative rather than as a health benefit encourages carriers to monitor these costs carefully and keep them low. Under federal law, health carriers’ administrative costs are limited to 20 percent of the total amount of premiums collected from consumers.
This law requires carriers to take on a more active role in PBM oversight, provides enforcement authority within the Bureau of Insurance, and requires a fundamental change in PBM business practices to reduce prescription drug costs for consumers.
Drug Affordability Review Board and Pharmaceutical Spending Targets – LD 1449
With this new law, Maine joins the ranks of states working to leverage the purchasing clout of state purchasers. Similar to a law recently passed in Maryland, the Maine law establishes a Drug Affordability Review Board (DARB), charged with setting prescription drug spending targets for public entities including state, municipal, state university, and community college employees and teachers. Each group currently operates its own health plan. The five-member DARB, with advice from a 12-member advisory council representing public payers, will set drug spending targets and monitor how effectively public payers meet them. The law spells out a number of strategies the board can consider to help public purchasers meet their expenditure goals, including collaborating with other states and consortia to purchase drugs in bulk, restructuring formularies for public payers, procuring common expert services for public payers, and securing deeper rebates. Of particular interest, the law also allows the board to consider expanding the purchasing pool for prescription drugs and allowing carriers who cover small businesses and individuals to buy into a public payer drug benefit plan. The first report on drug spending targets is due in 2021.
While the DARB cannot compel a public purchaser to meet its target, it must report whether public purchasers have met their cost targets annually to the state Legislature, which is responsible for approving their budgets. The first report on drug spending targets is due in 2021.
Revamped Drug Transparency Requirements – LD 1162
Using NASHP’s recently released prescription drug transparency model legislation 2.0, Maine revamped its drug pricing transparency program. The law requires drug manufacturers to report to the Maine Health Data Organization (MDHO) — the state’s all-payer claims data program — when they increase the wholesale acquisition cost (WAC) of brand-name and generic drugs by certain thresholds. The law establishing the DARB, noted above, makes reference to using this data base in setting state drug spending targets.
This law also authorizes the MDHO to require pricing component data for specific prescription drugs from manufacturers, wholesale drug distributors, and PBMs and compels those entities to share that data. This bill also has more stringent enforcement mechanisms. If these entities fail to report the requested data, the state has the authority to audit data and can require a reporting entity to submit a corrective action plan for reporting deficiencies.
The NASHP transparency 2.0 model encourages states to adopt a common data set, which will reduce reporter burden and yield standardized, actionable data. The Maine bill goes beyond other states’ transparency bills because it requires reporting from each entity in the supply chain about past and projected costs and revenues at the individual drug level. A more robust set of data from the entire supply chain will help the state identify which players contribute most to drug price increases.
Wholesale Prescription Drug Importation Program – LD 1272
Maine is the fourth state to pass a law seeking implementation of a wholesale importation program, along with Vermont, Florida, and Colorado. Maine’s Department of Health and Human Services must submit a request for approval from the federal government no later than May 1, 2020. This bill is unique in that the program design must consider whether the program can be developed on a multistate basis through collaboration with other states.
Maine has taken a big step to hold the entire supply chain accountable for the rising cost of prescription drugs. Lawmakers have demonstrated their commitment to holding all parties in the prescription drug supply chain accountable for rising drug costs. These four bills will work in conjunction with each other to achieve fair dealings from PBMs, standardize transparency reporting requirements, set pharmaceutical spending targets for public payers, and develop a plan for the importation of prescription drugs from Canada.
For more information about what states are doing to address drug costs, explore NASHP’s legislative tracker and read about newly-enacted laws.
The profound connection between the environment and human health makes headlines primarily when things go wrong: when air pollution triggers asthma attacks, water is tainted by toxins, and tick- and mosquito-borne diseases spread, propelled by a changing climate. But some state leaders see the health of the environment as a critical and continuous state policy priority.
A recent analysis by the National Academy for State Health Policy (NASHP) showed that at least half of the nation’s governors called for environmental protection measures in their 2019 inaugural or state of the state addresses. In addition, 23 state governors signaled their commitment to addressing climate change by joining the US Climate Alliance. Clean water, climate change, and clean and renewable energy goals topped the list of environmental priorities articulated by governors across the country. For example, the governors of Maine and Florida both addressed the environment in their speeches:
- Maine Gov. Janet Mills: “The Gulf of Maine is warming faster than almost any other saltwater body in the world, driving our lobsters up the coast. Our coastal waters are growing acidic, temperatures are fluctuating, and sea levels are rising, endangering our shellfish industry. Our forests are less suitable for spruce and fir and more suitable for ticks. Climate change is threatening our jobs, damaging our health and attacking our historic relationship to the land and sea.”
- Florida Gov. Ron DeSantis: “Our economic potential will be jeopardized if we do not solve the problems afflicting our environment and water resources. …We will fight toxic blue-green algae, we will fight discharges from Lake Okeechobee, we will fight red tide, we will fight for our fishermen, we will fight for our beaches, we will fight to restore our Everglades and we will never ever quit, we won’t be cowed and we won’t let the foot draggers stand in our way.”
State leaders are also taking action on concerns about the environment and climate change through executive orders and budget and legislative proposals. Here is a snapshot of some recent actions state leaders have taken.
A number of new governors have issued executive orders that seek to address climate change, protect clean air or water, and protect residents from toxins:
- Colorado Gov. Jared Polis issued Executive Order B 2019-002, “Supporting a Transition to Zero Emission Vehicles.”
- Florida Gov. Ron DeSantis issued Executive Order 19-12, “Achieving More Now for Florida’s Environment,” which directs the state departments of environmental protection, health, and economic opportunity to protect the state’s water resources through a range of actions, including “adamantly oppos[ing]” all off-shore oil and gas activities, including fracking.
- Florida is not the only state concerned with extraction off its coastline: South Carolina Attorney General Alan Wilson filed a motion on Jan. 7, 2019, to block seismic testing and drilling off South Carolina’s coast. The state joined a lawsuit against the federal government filed by some of the state’s local governments and the South Carolina Small Business Chamber of Commerce.
- Maine Gov. Janet Mills’ executive orders include 5 FY 19/20, “An Order to Study the Threats of PFAS [Per- and polyfluoroalkyl] Contamination to Public Health and the Environment,” which creates a task force to study the risks posed by certain industrial chemicals that have been found in water and soil. Executive Order 3 FY 19/20, “An Order Concluding the Maine Wind Advisory Commission and Wind Permit Moratorium,” ends a moratorium that had prohibited the state from considering new wind turbine permits.
- New Mexico Gov. Michelle Lujan Grisham issued 2019-003, an “Executive Order on Addressing Climate Change and Energy Waste Prevention,” which establishes a Climate Change Task Force. It also directs all state agencies to evaluate the impact of climate change on their operations and integrate into their programs strategies to mitigate climate change.
- Virginia Gov. Ralph Northam’s executive orders include “Increasing Virginia’s Resilience to Sea Level Rise and Natural Hazards,” which directs state agencies to plan for increases in extreme weather and natural disasters attributable to climate change.
Some state legislators across the country are introducing bills designed to protect the environment by promoting clean or renewable energy. A small sample of the bills include the following:
- Colorado’s HB 19-1261, “Climate Action Plan to Reduce Pollution,” would establish greenhouse gas reduction targets, and specify considerations for the state air quality commission to take into account when setting rules and policies to reduce greenhouse gasses. At the time of writing, the bill was awaiting the governor’s signature.
- Maine Gov. Janet Mills signed “An Act to Prohibit the Use of Certain Disposable Food Service Containers,” which bans single-use food containers made of polystyrene, which is also referred to as Styrofoam. She also signed LD 216, which protects water quality in shoreland areas.
- Maryland Gov. Larry Hogan signed the Clean Cars Act of 2019 (HB 1246), which expands the tax credit for purchasing electric vehicles, and doubles the funding for the program to $6 million.
- In Nevada, Gov. Steve Sisolak signed SB358 into law on Earth Day. It requires that 50 percent of electricity generated, acquired, or saved by 2030 come from renewable sources or efficiency measures.
- Virginia Gov. Ralph Northam signed SB 1355 “Coal Combustion Residuals Impoundment; Closure,” into law on March 19, 2019. It requires owners or operators to close coal ash ponds at certain locations within the Chesapeake Bay watershed.
A number of state budget proposals aimed to ensure funding for the environmental priorities governors outlined in their speeches. A small, non-representative sample of these proposals includes:
- The Florida budget, which was awaiting the governor’s signature at the time of writing, includes $682 million to protect the state’s water resources, including Everglades restoration, according to the chair of the House Agriculture and Natural Resources Appropriations Subcommittee.
- Maryland’s enacted budget includes a $20.2 million special fund appropriation for renewable and clean energy programs and incentives, and requires reporting on Chesapeake Bay restoration efforts.
- Utah legislators appropriated more than $28 million for air quality initiatives, according to the state’s department of environmental quality.
- The Wisconsin executive budget act (SB 59), pending at time of writing, would increase general obligation bond authority for the Safe Drinking Water Loan Program for municipal drinking water infrastructure, and for the Clean Water Fund Program, which funds local government pollution and sewage projects.
Cross-Agency Environmental Initiatives
A number of states are establishing environmental task forces or committees that draw on the expertise of a number of agencies and disciplines within each state:
- Florida’s Executive Order 19-12 calls for a Blue-Green Algae Task Force.
- Maine introduced LD 1284/HP 926, “An Act to Create the Science and Policy Advisory Council on the Impact of Climate Change on Maine’s Marine Species.”
- New Mexico’s Executive Order 2019-003 established an interagency Climate Change Task Force.
- Virginia’s Executive Order 29 established the Virginia Council on Environmental Justice.
- Wisconsin established the Speaker’s Task Force on Water Quality.
These examples demonstrate how states are taking concrete policy steps to further environmental protection agendas. They also illustrate how states can use their policy levers to tackle one of the thorniest health issues facing states, the nation, and the world.
This is the first in a series exploring how state leaders can improve the upstream factors affecting health, such as clean air, safe housing, and quality early education.
This series is produced in partnership with the de Beaumont Foundation.